Amgen Inc. has derived higher sales and profits from its long history of deals for years, and like its peers, the biotechnology bellwether remains on the prowl for assets that can sustain it in the years ahead. While splashy takeovers grab headlines, collaboration has been in vogue in the drug business. On Tuesday, Amgen said it would pay Arrakis Therapeutics Inc. potentially several billion dollars to develop targeted RNA degraders across at least five programs.
Last week, Amgen said it would partner with Generate Biomedicines to discover and develop protein therapeutics, paying the Cambridge, Mass.-based company $50 million up front and as much as $1.9 billion down the line if certain milestones are met in five programs. With the JPMorgan Healthcare Conference this week, Bloomberg spoke with top drug-business dealmakers about what they expect in 2022.
This installment features Rachna Khosla, senior vice president of business development at Amgen. The interview was edited for clarity and length.
What’s Amgen’s deal strategy?
Accessing external innovation is part of our DNA. We think a balanced approach is the right way for Amgen. We have done large-scale acquisitions, medium-size deals, smaller acquisitions, and we tend to rely heavily on collaborations. For us, it’s really about what is the right opportunity for Amgen? Who are the right partners? And can we find the right deal structure that is a win-win for both companies?
Today, 50% of our revenue is from deals that we’ve done many years ago.
What opportunities excite you?
In inflammation, oncology and cardiovascular, we are open to looking for opportunities that span the spectrum from research to marketed products. In nephrology, bone and neuro, it’s a little bit different. If there’s an opportunity where we can add value from leveraging our manufacturing or our commercial capabilities, and frankly, even development, we’d be open to looking at those opportunities.
Two years ago, we decided to exit our neuro research capabilities. We felt there are really interesting things happening, but we will focus our efforts elsewhere. Instead, we opted to look for creative alternatives and creative structures.
Earlier this year, we announced the creation of Neumora. We teamed up with Arch Ventures to create a company where they can pursue neuro and we can partner with them. We put in capital so we have an equity stake in the company, as well, and we’re also bringing our deCODE Genetics insights to the table.
What’s it been like trying to pursue M&A amid the pandemic?
I have seen us perform at the greatest level of productivity and efficiency that I think I’ve seen over the last couple of years. The data speaks for itself: We announced five deals last year. I would’ve been the first person to say you can’t get a deal done virtually, you really need to be in the room. The pandemic really proved all of us wrong.
How would you describe the current dealmaking environment?
As a pioneer in the industry at just over 40 years old, we understand what it feels like to be a smaller emerging company that’s growing and has grand aspirations. Many growing companies may not have the capabilities to take their products or platforms to the next level, and so they welcome that partnership. We listen to see how we can work together to find the right deal and the right deal structure that can allow us and the party that we are dealing with to meet their objectives.
Are you factoring the new regime at the Federal Trade Commission into your decisions?
We have to be mindful of it as we have been this past year. We announced two acquisitions under the new regime. It hasn’t changed how we look at opportunities. I think we’re all mindful of the fact that things have changed, and we’ll continue to keep that in mind as we evaluate future opportunities.
Do you still see value in events like the JPMorgan Healthcare Conference?
We had planned to be virtual this year anyway. It’s about building the relationship and, frankly, virtual may allow you to build a relationship better because you’re not rushing off from one meeting to the next. The quality of the interaction is probably better because you can actually dedicate – even if it’s only 30 minutes – to having the discussion than worrying about getting to your next meeting in San Francisco.
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